The guidelines of the Doctrine Declaration (“Ficha Doutrinária”) dated 04 December 2017 clarify tax liabilities based on nº 5 of article 81º of the IRS Code. Assessment of income from foreign sources classified under categories E (capital), F (long-term rent) and G (capital gains) earned by taxable persons considered to be Non-Habitual Residents follows the exemption method where the source country has the power to tax this income under the applicable Double Taxation Agreement. This rule infers that the tax exclusion does not hold for jurisdictions without such an agreement in place. Tax-exempt income must still be reported annually in Portugal to determine the final tax rate to be applied to total aggregate income subject to assessment.

There are currently more than 420,000 registered foreigners residing in Portugal. Until 2000, the international population in Portugal never exceeded 2% of the total resident population. By 2017, the number of legalised foreign nationals represented almost 4%. Brazilians are the single largest group: 20%, followed by Cape Verdeans, Ukrainians, Romanians, Chinese and English.

Golden Visa investment rose 34.6% in June over the previous 12 months to 52.8 million euros, but fell 18.8% in the first half of 2018, according to statistics from the Immigration and Borders Service (SEF). Since 2013, 10,793 Golden Visa residence permits have been allocated to wealthy migrant families: 576 in 2013, 2,395 in 2014, 1,322 in 2015, 2,344 in 2016, 2,678 in 2017 and 1,478 so far in 2018.

With a flourishing market and higher spreads, European banks – including German and Dutch – are probing real estate developers in Portugal, offering financing for new projects that, until recently, were held up due to a lack of credit. With local banks lacking the capacity to respond to current market demand, foreign banks are positioning themselves to attract new business.